10:00 am, September 18, 2013Updated: 12:19 pm, May 19, 2014

Jacqueline Saulsberry, a service coordinator at the Illinois Eye Institute, gathers information from patient Shameka Lewis-Coolidge during an appointment in Chicago. More than 100 nonprofits and related organizations have been recruited by the federal government as “navigators” who can assist the 30 million uninsured people gaining coverage under the Affordable Care Act.

August 9, 2013

March 19, 2014

It wasn’t long ago that virtually no one outside of health care policy circles had heard of the navigator program, an obscure provision of the Obama Administration’s sweeping health care overhaul. But the navigators have suddenly become the latest Obamacare controversy, and the attention may be starting to undermine the program.

Supporters of those state laws say they strengthen consumer protections. But many consumer advocates say the state measures unnecessarily limit navigators, burdening them with fees and regulations that in some cases are redundant of those required by federal law.

Now those laws have prompted at least two groups — one in Ohio and one in Texas — to decline navigator grants they had previously been awarded. Another group, in West Virginia, declined its grant money due to increasing political pressure, though that state did not pass a navigator law.

“This is what we were worried about,” said Katie Keith, who tracked the state laws as a research professor at Georgetown University, but recently began working for the liberal political consulting firm Trimpa Group. “I think it’s unfortunate but perhaps not terribly surprising.”

As the Center reported, the state laws were largely based on recommendations from insurance agents and brokers, who saw navigators as potential competitors and lobbied hard to pass stricter regulation in the states. Now, over the past few weeks, a growing chorus of politicians — almost exclusively Republicans — has been warning that the navigator program is ripe for abuse and fraud.

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In late August, a group of congressional Republicans responded by sending a letter to the newly announced navigators requesting detailed information about their operations, including the salary and duties of anyone performing navigator duties, information on how the groups would protect personal data for clients and, “all documentation and communications related to your Navigator grant,” including all communications with state and federal agencies or outside groups. At the same time, state officials were increasing scrutiny of the program, including in states that had not passed navigator laws.

West Virginia’s Patrick Morrisey was one of 13 attorneys general to send a letter to federal Health Secretary Kathleen Sebelius expressing concerns over how navigators would ensure privacy for their clients. Morrisey also sent a set of detailed questions to the two groups that had received funds to operate in West Virginia.

One of the groups, the non-profit West Virginia Parent Training and Information, Inc., later decided to decline its navigator grant. “The political pressure took away from what we were supposed to be doing,” said Pat Haberbosch, the group’s executive director, adding that a partner organization she had applied with had also expressed concerns. “I feel terrible that the citizens are not going to get appropriate information or the benefit of this proposal. That’s a huge concern of mine. But I also thought if we were going to try to do it, there was no time left to do what we’re supposed to with all the pressure.”

Haberbosch said that the media attention on the navigator grant had become a drain on her limited resources — she said she received 17 phone calls from reporters in one day — and that the whole thing had become a distraction from the group’s work. “This is way beyond anything I imagined that I would have to do,” she said.

Morrisey’s office did not respond to a request for comment.

Richard Olague, an HHS spokesman, called the letter from congressional Republicans a “blatant and shameful attempt to intimidate” navigators. He said that the department is tracking state laws and regulations and working with state officials to make sure that navigators are able to carry out their work.

The same day that HHS announced the navigator grants, the Oklahoma Insurance Department issued a bulletin clarifying existing law that carves out the duties of licensed insurance agents. In a press release, Insurance Commissioner John D. Doak said the federal government is wasting money on navigators and that agents and brokers are already trusted to help consumers. “These individuals are trained, tested, background checked and insured. Navigators are not regulated by the Insurance Department and cannot provide these assurances. If they perform any of the duties restricted by law to our licensed agents and brokers, we will put a stop to it.”

The bulletin prompted Cardon Outreach, a Texas-based company that helps people enroll in Medicaid, to decline $833,000 it had been awarded to operate in four states, including Oklahoma.

“When you combine that with the new regulations being presented in the various states across the U.S. on the navigator program,” said Chuck Kable, the company’s chief legal officer, “our view was that the scope of the program had changed.”

Cardon Outreach was also planning to operate in Utah and Florida, each of which passed navigator laws, and in Pennsylvania, which has not. (Florida has also barred navigators from operating on the grounds of county health departments.) Kable said the company did not have the staff necessary to make sure the company complied with various state laws.

Cincinnati Children’s Hospital Medical Center also decided to decline the $124,419 it had been awarded. Terry Loftus, a spokesman for the hospital, said in an email that after discussing Ohio’s new law with the state Department of Insurance, the hospital determined it could not accept the funding.

Ohio’s law, like those passed in many other states, prohibits navigators from giving advice about or recommending specific insurance plans offered on the exchange. It also established a state licensure and certificate program for navigators — on top of the federal certification — and required applicants to undergo background checks and pay a small fee. Loftus would not say which aspect of the law led to the hospital’s decision.

It’s unclear what will happen with any navigator grants that are returned. Olague said HHS will follow its standard policies, which can include reallocating the money.

Despite the setbacks, however, Keith said that the political attention given to the navigator program is unlikely to derail the larger effort to enroll people in health plans through the exchanges. “It’s certainly a distraction,” she said, “but do I think it’s going to seriously limit outreach and enrollment? No.”